The question is "Would it be better to connect the new Linksys ADSL2MUE modem along with a WRT54g Router OR just use a WAG54g.."

The ADSL2MUE is advertised as supporting new faster ADSL standards, so in theory it is more able to accomodate a future faster DSL service; however, as that seems, at least in my corner of Canada, to represent expensive business-class service at a matching big cost, there is not much near-term advantage for the person who will buy everyday "fast" DSL service as it exists today.

A press release I saw on the ADSL2MUE suggests that it is only an ADSL modem, so you would still need a router in between the PCs and the modem itself.

The downside is that one is exposing oneself to potential firmware bugs in the newish model product.

I use a GNet BB0060 ADSL router with a WRT54G (v2) , and things work very well with this configuration.

I think that if I were starting from scratch I would look for an ADSL modem that builds in a router with say 4 ports for PCs, and also wireless. These do exist. Again, Gnet has such an ADSL modem, for example. My impression is that Linksys products, in being highy programmable, tend to trade reliability for geeky configurability. I like Linksys gear a lot, but I like it time-tested, not new and buggy.

There is an upside to keeing the ADSL modem separate: You can replace the ADSL modem if something better comes along, while keeping the WRT54G, which is certainly a good router (at least as v2), and one with a robust feature set.

By the time future super-fast DSL options are affordable, I would think there would be other time-tested and less expensive options than the Linksys ADSL2MUE.